American Express is an international corporation offering an expansive variety of products and services. Its success can be attributed to its focus on customer service and innovation as well as smart, industry-changing marketing tactics like Small Business Saturday.
AmEx started as a money order business competing against the US Post Office, making their product popular among immigrants sending funds home and people without checking accounts.
Founded in 1850
American Express is an international financial services provider known for providing credit cards, corporate and travel services, merchant acquisition and processing, settlement, loyalty programmes and expense management solutions. American Express’ Global Commercial Services (GCS) division caters to businesses of all sizes by offering payment products and digital payment solutions; their premium card offerings feature airport lounge access concierge services enhanced purchase protection as well as premier customer service.
American Express began operations in 1850, initially as an express shipping business. Following an alliance with Wells Fargo & Co. to form Overland Mail Co. and Butterfield Overland Stage Co., American Express quickly expanded into Western United States freight shipping networks and later financial services offerings.
Early 1900s saw expansion for this business as it established offices around Europe and developed global presence. Travel by Americans abroad increased, prompting the company to create the traveller’s cheque after noting many money orders went uncashed, leaving an abundance of funds lingering behind. Traveller’s cheques became safer alternatives to cash that helped increase revenue and profitability for this venture.
After initial difficulties with delinquent accounts and insufficient credit checks, American Express hired George Waters as an outside consultant to fix it. Waters revolutionized every aspect of company operation from accounting to credit checks; as well as streamlining membership lists to remove those who had paid without actually receiving anything in return. His efforts bore fruit, as American Express soon had millions of cardholders spending billions each year.
Incorporated in 1851
American Express first emerged during America’s western expansion as one of the earliest successful freight and valuables delivery companies, growing naturally into money orders, traveler’s checks, credit cards and other financial services over time. Now American Express stands as an industry competitor among large financial services companies due to its comprehensive offerings.
American Express saw great success during the Civil War period as its company and express industry in general provided essential supplies and ballots to army depots as well as parcel deliveries in areas captured by Union forces. Profits became so great that American Express started disbursing enormous dividends to shareholders.
By the late 1920s, however, the company was experiencing issues with both its accounting system and travel division. Furthermore, financial raiders increased competition; although most threats were successfully counteracted by taking steps to improve profitability.
George Waters, previously from IBM and Colonial Stores supermarket chain, was brought in as the company’s consultant to overhaul their charge card division. Waters employed two simple strategies to restore American Express as merchants saw American Express as their marketing partner by dedicating 0.5% of gross sales towards retail advertising; further reorganizing American Express into an efficient operation with more focused structures.
American Express continued to grow after the Civil War through acquisitions and new office openings. During the 1980s, they added Cheques for Two as well as a corporate purchasing card – by then over 10 million cardmembers had cards that accepted in over 2.7 million locations worldwide!
Founded as a money order business
American Express’ business model centers around providing excellent service to their customers. They invest in training customer service representatives and implement robust security measures for an effortless transaction experience for each of its customers. In addition, American Express focuses on operational excellence by continually striving to enhance products and services offered to its clients, and strives to expand into domestic and international markets while creating strategic partnerships and adopting digital innovation as part of their growth strategy.
American Express initially began as a money order service provider and quickly established itself in this niche market by providing convenient funds transfers for immigrants living overseas. Their money orders offered an affordable alternative to postal delivery services or bank wire transfers – providing American Express with an edge in brand awareness by targeting an underserved market and offering value-added services that helped solidify its brand presence.
American Express began expanding their reach during the 1960s and ’80s by purchasing various firms such as investment banking firms and stock brokerage houses, along with insurance providers like Fireman’s Fund Insurance Company (which later separated) and Shearson Loeb Rhoades (now part of Citigroup). American Express further attempted to diversify by introducing the iconic green American Express charge card in 1958.
American Express’ success in the US can be attributed to its strong consumer culture of credit cards and loyalty programs, but in other markets where consumer spending habits and financial conditions vary. To overcome these hurdles, American Express has broadened its offerings by including merchant services as well as travel and expense management solutions; also working on strengthening merchant relationships by offering value-added services and using customer insights.
Founded as a traveler’s cheque business
As the company expanded, its leadership realized they needed to streamline operations and focus on core business. To accomplish this, they implemented an accounting system and revised their organizational strategy; additionally they hired George Waters formerly from IBM and Colonial Stores supermarket chain to establish a solid charge card division.
American Express adopted a novel approach to business that saw them increase both profits and customer loyalty, as well as provide unique services such as airport lounge access and travel credits for its customers. This marked an important departure from their old approach where customers had to wait long lines just for cash or currency exchange for traveller’s cheques.
American Express continues to adapt to changing consumer needs and market conditions by harnessing technological innovations, including electronic data processing and computerized transaction systems, to streamline its processes and provide customers with an improved and more secure experience. Furthermore, it offers various digital finance tools for managing transactions for businesses of all sizes.
American Express generates revenue through card member spending and fees, merchant fees for card acceptance and fees from small businesses who utilize its services. While in certain markets American Express faces competition from local payment methods or credit cards with lower fees, the company focuses on expanding digital offerings to meet increasing demands for financial solutions online and mobile.
American Express may have experienced controversy in the past, yet is actively working to enhance its reputation and enhance customer service. Changes were implemented within its policies; fines and refunds paid out; customer service enhancement initiatives undertaken. Their ongoing vigilance in upholding their reputation remains essential to their long-term success.
Founded as a credit card business
American Express stands apart from its competition by issuing independent cards rather than joining existing card schemes such as Visa or Mastercard, which enable cardholders to process payments across an established network. As a result, American Express charges higher transaction fees to merchants compared with its peers; additionally it provides various other services including acquisition, settlement, point of sale marketing (POS marketing), loyalty program creation and management as well as acquisition.
As the global economy expanded, demand for traveler’s cheques skyrocketed and immigrants used money orders to send funds home to family in Europe or elsewhere. Soon thereafter, this business quickly established international presence by opening offices in France, England, and Germany.
American Express faced stiff competition from other companies such as Citicorp who claimed their traveler’s checks were more secure. Furthermore, this company faced unfavorable press coverage that led to declining market share and brand recognition; eventually by the late 70s they started losing market share as well.
Harvey Golub became American Express’ CEO in 1993 and implemented several recovery strategies. These included divesting itself of unprofitable divisions, cost cutting and brand promotion – including what were derisively termed “guerrilla advertising campaigns”, such as placing television and space advertisements featuring cities hosting Olympic Games to associate it without officially sponsoring them.
American Express is now one of the largest credit card businesses worldwide, boasting over one billion cards and serving over 94 million merchants around the globe. American Express’ success can be attributed to its unique business model that involves a closed-loop payment system which enables it to compete against other payment systems in various ways.
